RHB | Malaysia | Bank Negara Malaysia Opted To Leave The OPR Unchanged At 3.25%, 19 Sept 2014

Economic Research	19 September  2014
Malaysia
Economic Highlights
Bank Negara Malaysia Opted To Leave The OPR Unchanged At 3.25% Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) decided to maintain the Overnight Policy Rate (OPR) at 3.25% on 18 September, after raising the OPR by 25 basis points on 10 July. The Central Bank opted to be cautious on tightening its monetary policy further, following a sharp slowdown in July’s exports and industrial production numbers. With price pressure remaining stable, the Central Bank focused its monetary policy stance in support of growth. This is in line with our expectation for the OPR to be kept at 3.25% for the rest of the year. We believe there is no urgency for the Central Bank to be aggressive in its monetary policy tightening given that the country’s domestic demand is heading south, suggesting that the tightening measures implemented by the authorities in 2013 are beginning to take its effect. At this juncture we believe the Central Bank could still raise the OPR by another 25 basis points in 1Q 2015, depending on the economic performance of the country as the year progresses. Economist:  Peck Boon Soon  | +603 9280 2163 Economist:  Shafizal Shafaai  | +603 9280 2179